Gift Cards, Coupons, and Gift Certificates - The Forgotten Killer Resource

I look at gift cards, coupons, and gift certificates as the “Rodney Dangerfield of Promotions”. They just don’t get the respect they deserve unless you’re in the supermarket business and you live your life by manufacturers’ coupons. A few months ago, I did an article about the boom and the use of coupons and coupon services, and my recommendation was to jump on the bandwagon of coupons because it was a paid performance vehicle. Somehow these three promotional vehicles get clumped together (as I did) when in reality; they need to be separated so they can stand up on their own merit.

Having said that, these three tools are often interpreted differently. A gift card can be a coupon, a coupon can be a gift card, and a coupon can be a gift certificate. And if you were not confused before, I have probably made you more confused. Let me explain:

• In the beginning, there were just gift certificates and coupons. Never were they ever confused. A gift certificate was something you purchased in a store and used to give as a gift.
• A coupon on the other hand was a price reduction on a specific item for a very limited time period. Many of these coupons were sponsored by manufacturers who wanted to insure that the savings they were offering would be passed on to the consumer.  
• The next incarnation of a coupon was the use of the store coupon for a specific or any item; example, a $10 coupon to stimulate the sale of coats. The coupon could only be redeemed if someone was purchasing a coat.
• The biggest mistake that stores make in using coupons is they sometimes forget that they only work well with a tight expiration date.
• The beginning of the combination of using a gift certificate like a coupon was for price incentives.  This concept exploded with the birth of the gift card.
• The next big change was the shifting from the old fashioned gift certificate to the modern credit card looking gift card. It worked because it looked like a credit card, smelled like a credit card, and worked like a credit card. The best part was it didn’t get thrown away. They would stay in a woman’s wallet long after the expiration date (yes, I said woman’s wallet; that was not any type of slip). The use of gift cards and coupons between men and women are staggering. Women will use a gift card 18 times more than men.  A simple test is to ask 5 men and 5 women “how many gift cards are you carrying in your wallet?” For every one a man has, a woman will have at least 5. Enough said!

Why should we use these tools?

The reason is simple. The numbers in the redemption rates due to the recession have skyrocketed. People are looking for every way possible to save money. USA Today reported that in 2009 the increase in redemption of coupons was up 211%. The interesting thing is that the use of gift cards, whose sales increases have been in the triple digit range, have been the number one selling item in retail for the past five years. A gift card only has a redemption rate of 88%, which means that 12 cents out of every dollar is never redeemed. That is the reason why every retailer should jump on this bandwagon. Where can you get a 12% return on your money?

How can these tools be used?

Here are some of the more interesting ways of utilizing these tools.

1. A gift card promoted and sold in the traditional manner. You pay me $50 and you will receive a card to give as a gift. Many stores will gift wrap a gift card for an added touch.
2. You promote gift cards by offering a gift card incentive for someone who is purchasing a gift card. The way this works is to buy a gift card for $50 and receive a $10 gift card for yourself. It is a true win/win.
3. Your gift card can be sold by a third party whereby you will receive an incentive for purchasing that gift card from that third party. A friend of mine goes to a supermarket to buy a gift card for a restaurant she is going to that evening.  When purchasing this card, she automatically gets 20 cents off per gallon at their gas station. So if the person were to purchase 5 gift cards to give as Christmas gifts, they would receive $1 off per gallon of gas. That’s what I call creating loyalty. So here is the lesson, when was the last time you checked with a supermarket to put your business on their program?
4. Send out a gift card to your best customers. Many stores who sell high end items, will send out a $25 or $50 gift card because that is the sufficient incentive which will WOW the customer into coming in. The goal is to give the customer a reason to come in to spend. And do they ever!
5. Using the same concept, send out a gift card for a customer’s birthday.  I would send out a $5 or $10 coupon with no strings attached other than you cannot purchase a gift card with a gift card. It is one item per coupon and there is no cash back.
6. A gift card used for fundraising activities – the charity sells your gift cards, or at least help to promote the sale of a specific gift card for that charity, the charity would receive an incentive of between 3% and 10% of the total amount redeemed. The part I love about this is that your store can be part of the minister’s sermon. I have actually heard one promote a specific business because of all the money the church was making from that business.
7. Have a special promotion just for gift card days whereby you send out gift cards to all or part of your mailing list.
8. The bounce back coupon, which is the most highly redeemed of all coupons – the way it works is someone makes a purchase of $100 and they receive 20% off their purchase (or $20) in the form of a gift card.  These gift cards can be redeemed within 7 days of the purchase, but not on the day of the purchase.

There are countless ways the gift card/coupon can be used to build your business. The reason why it is so important is that it works and it is one of the most trackable and measurable advertising vehicles we have available today. Let me know what your experience is like and I will share your ideas.

The Seven Breakthrough Marketing™ Tools

If you are a regular reader of this column you are beginning to better understand that there is truly is a revolution taking place in marketing today. There is an explosion of ideas coming to market. But it’s more than just the number of ideas-- it is the speed in which these ideas become accepted and used by large numbers of our marketing audience.

The days of saying, “We do it this way”, or “Why fix it if it’s not broken” are no longer a part of a marketer’s vocabulary. Then you add one more element to the mix of quantity of ideas, the speed of acceptance, and universal use --the cost. Most of these ideas are either low cost or no cost but do require commitments in both time and education.

The bottom line is that we reach people differently today. Consumers have new buying habits and ways in which they receive information about the products and services they seek. The following is my list of The Seven Breakthrough Marketing Tools we need to know in order to compete in this overcrowded marketplace:

1. The Touch Tools - These are the ways that we get in touch with people-- from face to face, to telephone calls, to communicating via answering machines, to traditional mail, e-mail, text, newsletters, etc. The reason why this tool is so important is because if a business is collecting email addresses but the majority of their customers prefer to be contacted via the telephone, then the method is worthless. Making a business aware of the preferred touch tool can make a dramatic impact on the effectiveness of their marketing efforts.
   
   
2. Multiple Landing Pages - Today a businesses DNA is made up of the words that our prospects use to find our type of business, our products and or our services. This is perhaps the most important of all of the tools because people do not go into websites from the front door anymore. They do searches for specific words and phrases and we must have a single landing page where they land and then we can redirect them to the rest of the site or sites. In other words, if you sell Blown glass by Josh Simpson. Make sure you have a separate dedicated page for just Josh Simpson Art where you use Josh Simpson’s name as often as possible. That page links to the rest of your site.
   
   Then you want to have another site that just talks about “Blown glass” and again the term “Blown glass” appears as many times as possible. These pages are not generally long. They have only a couple of short paragraphs and, of course, they must have some graphics that will encourage the viewer to explore or learn more about your  company and entice them to click on other sections of your website.
   
   
3. Call to Action Graphics - The call to action is the action step we discussed in #2.  These are the graphic nudges that will encourage the reader to seek more information. This is perhaps the single biggest mistake that we all make when we don’t create a vehicle for a prospect to find out more what we can do for them. That is why websites today should have multiple forms to fill in to receive “additional information”, a “trial period”, or “free offers”, etc. The reason why you need graphics is to make it stand out. A call to action without graphics draws 73% less action.
   
   
4. Create Your Lead Nurturing System - When someone expresses an interest in a company or a product, what system do you have in place that will follow up with the customer? This can be a series of emails, letters, newsletters, or even phone calls over a desired time period, generally from 3 months to 1 year. I like to say, “until they Buy or Die”. But trying to come up with an idea of what to send or say every month or quarter can be a daunting task that rarely ever gets done. However, if you plan the pieces in advance the job is less intimidating and gets done.
   
   
5. Opt-in text/M-commerce - This is perhaps the fastest growing of all marketing tools and one that I am about to make a major personal investment in Texting Advantage for Retailers ™.  Here is the concept:  You will see in an ad on a sign in your window or on the side of the bus that says something like text 71277 and in the message type in “specials”.  Or it could even say get our tips on ………………………  This message can be on a billboard, store window, plastic bag, etc. The bottom line is that people can opt in to your list without ever having any contact with your business. That is a powerful concept that in turn will result in sales.
   
   
6. You Tube and the Video - This powerful technique is changing how we not only learn but also the way we entertain our self and it’s all FREE. It’s important to separate the concept of using Video and YouTube. YouTube is important because it is a first rate delivery system that has an unbelievable distribution network. But it is the use of video that is so important. These include:
   
   
1. Video Testimonials - Here you will capture comments by customers, make a video of them, and post them on your website. They can also be played in the store.
   
   
2. To Learning Minutes - These are 2-4 minute educational videos that should be branded and can teach the customer something about a product or technique. Again, they can be played in the store, in a section of a website, and can be combined in a collection that can be sold.
   
   
7. The coupons - I recently wrote an article pertaining to the use of the various coupon services. My advice is that I would get involved with as many coupon services as possible. Why? Simple, they are all pay for performance. So as long as you make an appealing offer without giving the store away, you can’t lose.
   

These are my seven tools but the way things are happening so fast, be prepared to learn new twists on some old rules and some ideas that could only happen because of the new technology that the internet delivers to us almost daily.  My advice: select what makes sense to you adapt and adopt it. But fasten your seat belt and get ready for the ride of the explosion of marketing ideas and concepts.

Are You a Groupie? You Will Be!

BUT FIRST LET ME SHARE A PERSONAL THOUGHT.

I had company over the weekend and I was asked when I was going to slow down and enjoy life. Are you kidding? What could be better than what I am doing now? I get the opportunity to learn about the latest and greatest ideas, concepts, strategies, techniques, and tools. Then I get to share them with the world and make a difference in the lives of people that do what I did. I think that’s called fulfilling, rewarding, and exciting.   Why do I say exciting? Because I love the new and shiny. As a retailer, it was the love for the different, exciting, the bright and shiny new whatever that made me a success. As a writer I still share that same love. That’s why this is my moment because we are experiencing an explosion of ideas and here is another one that has the potential to change your life and business.

No, I am not trying to be dramatic but the results are. Get ready to be a Groupie, because you will.

The concept is called is called group buying or better referred to as Group Couponing. There are websites popping up all over that are offering coupons from retailers to their groups or subscribers. Basically it’s a site that lists coupons that are paid by the retailer that is really pay for performance advertising. Yes, I would be a groupie for that type of advertising.

Pay for performance advertising says that you would be willing (actually any business person would be willing) to just pay only when the coupon is redeemed. If I would ask any small business owner if they would pay $10,000 in a month for advertising, the answer would probably be NO or way out of my budget. Then if I asked if $1,000 would be better? The response might be that it’s more in keeping with the budget. BUT if the $1,000 were to deliver only $2,000 in sales than the $1,000 would be way TOO MUCH. On the other hand if the $10,000 delivered $100,00 worth of business then the $10,000 would be cheap.

However if you through in the guarantee that you would only pay the $10,000 if you did the $100,000 worth of business, then it’s a home run.

This is what Larry Joseloff, director of content at Shop.org, the National Retail Federation's digital division said about this concept in a recent interview with USA Today in an article published on May 14th, 2010. “This is a way social media can be measured and a way for it to be monetized. I'm not prepared to say it's an overwhelming long-term consumer trend, but it's definitely something that's having an impact."

Gregg Pupecki, sales and marketing director for Wendella Boats & Chicago Water Taxi, is more effusive. His company sold more than 5,000 discount tickets on its first Groupon promotion and 20,000 on the next, which offered a 75-minute architecture tour of the Chicago River.



Here he talks about the coupon service, Groupon.com, one of the leading services (I will list the others as well). "I think Groupon is one of the best sales and marketing tools to come out since the Internet," he says. "Groupon is something any business owner or marketing manager can do themselves, no matter what size the company is."

Here is a partial list of companies that offer these services:

• 8coupons.com
• BuyWithMe.com
• LivingSocial.com
• CouponMountain.com
• CrowdSavings.com
• CouponCabin.com

The following is copied from BuyWithMe.com which is a site that explains why retailers should get involved. It explains the concept better than most of the other sites I reviewed.

Our partners (BuyWithMe.com) rave about our simple, seamless and speedy process.

1. Propose a Deal. Together, we work out a “win-win” offer by determining the service you want to feature and the minimum number of buyers required for your deal to go through, so that you’re guaranteed the volume you want. Simply provide your pictures, deal details, and business information, and our editorial staff handles the write-up for you, representing and protecting your brand as if it were our own.
2. Present the Deal. Your discount will be featured as “Today’s Deal” on our website and remain active under the “Other Deals” tab until the promotion ends.
3. Promote the Deal. Our tech-savvy customers visit our website and use social networking tools to get others to sign up in time for everyone to get the deal. BuyWithMe promotional support, email blasts, strategic alignments, and online contests help spread the word all over town.
4. Profit Without Risk. There is no “deal” if you don’t get the sales volume you require. We collect the pre-payment for you and deliver it in one check, so you can focus on all of your new customers!

Here is a way many of these services will earn extra money and is a win/win for all. Again this is from Buyfrom me.com

“Our “Bonus Deals" are valuable alternatives to reach our consumers even when you’re not running as “Today’s Deal.” We can also retweet your offer to our twitter followers, offer you banner ad space and generate other creative word of mouth campaigns.”

Why get involved in this type of advertising?

1. Almost every major retailer is jumping on this bandwagon.
2. It’s a completely measurable from Start to Finish.
3. There is NO Upfront Capital Expense: what could be better?

4. It will build your brand and exposure.
5. It’s easy to track your results. How many other forms of advertising can say that?
6. Built in loyalty. Loyalty is not easy to gain these days but coupons create a magnetic pull that just works.
7. Don’t feel as if you have to register for all of the services out there. Most of these coupon companies have affiliate programs where your coupon will appear on multiple sites because one coupon company will pay a fee to another company for the exposure.

My last bit of advice. Coupons WORK especially in higher ticket priced merchandise. They literally built my retail business. This is just putting the concept on steroids. And remember one more thing, rich or the better customers love coupons. (That’s probably why they are rich!) This system is a keeper.